Senate Crypto Legislation Stalls Amid Trump’s $2B Stablecoin Deal and Ethics Concerns

Article with AI Analysis

Date: May 8, 2025

Source: Cointelegraph, Reuters, Axios, CBS News

Introduction

A $2 billion investment involving former President Donald Trump’s family and a UAE-backed firm has ignited a political firestorm in Washington, stalling progress on the GENIUS Act a bipartisan bill aimed at regulating stablecoins. The controversy centers on potential conflicts of interest and ethical concerns, with lawmakers divided over the implications for U.S. crypto policy.

Trump's Stablecoin Deal Sparks Ethical Alarm

The deal in question involves World Liberty Financial (WLFI), a crypto venture linked to the Trump family, and MGX, a state-backed investment firm from the United Arab Emirates. MGX plans to invest $2 billion into Binance using WLFI’s USD1 stablecoin. Senators Elizabeth Warren and Jeff Merkley have called for an ethics probe, citing potential violations of the U.S. Constitution’s Emoluments Clause and federal bribery statutes.

“This deal raises the troubling prospect that the Trump and Witkoff families could expand the use of their stablecoin as an avenue to profit from foreign corruption,” the senators stated in a letter to the Office of Government Ethics.

Legislative Fallout: GENIUS Act Faces Roadblocks

The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, initially enjoying bipartisan support, is now facing significant hurdles. Nine Senate Democrats have withdrawn their backing, demanding stronger anti-money laundering and national security provisions. Senator Elizabeth Warren has been vocal in her criticism, emphasizing the need for reforms to prevent potential corruption and protect consumers.

Senate Majority Leader John Thune has expressed openness to amending the bill, but internal GOP challenges persist, with Senator Rand Paul expressing uncertainty about backing the legislation.

Political Tensions Escalate

The controversy has spilled over into broader political tensions. Representative Maxine Waters plans to block a Republican led event discussing digital assets, citing ethical concerns over Trump’s crypto ventures. Additionally, Trump hosted a $1.5 million per plate dinner at his golf club in Sterling, Virginia, raising further questions about the intersection of his political activities and personal financial interests.

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Read More

Read the full article on: https://cointelegraph.com/news/senate-crypto-bills-trump-ethics-concerns

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Disclaimer

This article was generated using AI and reviewed for accuracy. The information presented is for educational purposes only and should not be construed as financial advice. Always consult with a professional before making investment decisions.